Materials shortage in Vietnam’s wood processing industry

In the past decade, Vietnam’s wood processing industry has grown exponentially with last year’s export revenue figure doubling the figure in 2010.

This has resulted in an increase in demand for wood materials, from 25.7 million cubi metres in 2013 to 31.3 million in 2015, said Nguyen Ton Quyen, General Secretary of the Vietnam Timber and Forest Product Association.

He added that the overall output harvested from plantation forests, rubber trees and other sources in the domestic market was about 23 million cubic metres a year. And every year, a large amount of wood materials is imported for processing.

With the logging ban in China, many Chinese enterprises are sourcing from other countries including Vietnam and countries from which Vietnam is buying materials from. This has resulted in a fierce competition Quyen said.

Also, Quyen added that with the Chinese enterprises buying in bulk, Vietnam’s wood processing industry will face a severe shortage of raw materials. The same sentiment was given by Truong Mong Trinh, director of Moc Luc Wooden Furniture Co,. Ltd too.

She noted that in recent times, prices of raw wood materials have continued to rise from VND2 million-3 million a cubic metre to more than VND5 million now.

Prices of rubber wood too has rose by 20 to 25 percent earlier, said Do Xuan Lap, Chairman of Binh Dinh Timber Association.

With the fierce competition, it has cause d great pressure in the wood processing industry, Lap said.

A suggestion he gave was for the government to restrict the export of raw materials effectively, including raising export duties on the log and sawn wood.

Industry players also added that re-organising the production of plantation forests to boost the domestic supply of raw wood was necessary for sustainable forest plantation as well as to increase the inefficient use of raw materials.

Quyen said the country’s plantation forest area increased from 3.55 million ha in 2015 to nearly 3.9 million ha last year, of which about 200,000 ha obtaining the Forest Stewardship Council (FSC) certification.

The sector must work to enable all forest areas to receive FSC certification and other certificates in the coming years to meet the demand of import countries, who require only products made from legally harvested timber imported into their markets, he said.

According to Vietnam Net, Vietnam earned US$5.76 billion from wood and wood product exports in the first 10 months of the year, a year-on-year increase of 0.8%, with the US the largest importer of Vietnamese wood products, followed by Japan.

Revenue from wood and wood product exports is expected to reach $7.2 billion this year and $10 billion by 2020.

Last year, Vietnam imported 1.69 million cubic metres of log timber and 3.5 million cubic metres of sawn timber from over 100 countries and territories. The figures were 1.4 million and 2.3 million cubic metres, respectively, in the first 10 months of the year.

Source: Vietnam Net